Filing your Income Tax Return (ITR) on time is more than a legal obligation. It keeps you compliant, avoids penalties and speeds up refunds. While many taxpayers aim to file by the deadline, rushing often causes avoidable errors that delay refunds, trigger notices, or increase tax liability. Below is a clear, step-by-step guide to the most common mistakes, why they matter, and how to fix them.
-
Choosing the Wrong ITR Form
The very first error is filing under the incorrect ITR form. Each form matches a specific income profile. For example, salaried taxpayers with income under a threshold and no capital gains typically use ITR-1, while business or professional income needs ITR-3. Picking the wrong form can lead to processing delays or defect notices, so confirm the correct form before you start.
-
Quoting the Wrong Assessment Year
Make sure you file for the correct assessment year (AY). Filing for the wrong AY causes confusion and can lead to duplicate filings or rejections. For FY 2024–25 the corresponding AY is 2025–26, and deadlines may change; always verify the current year’s due date before filing.
-
Mismatched Personal and Bank Details
Your name, PAN, date of birth and contact details must exactly match PAN records. Any mismatch can block processing or refunds. Double-check check bank account number and IFSC code so refunds reach the right account without delays.
-
Not Reporting All Sources of Income
Declare every source of income, even if small or exempt. This includes interest on savings accounts and fixed deposits, rent, and capital gains. Exempt income still needs disclosure in the right schedules. Missing income can trigger notices and penalties.
-
Errors in Manual Entry
ITR forms require specific formats. Small mistakes like wrong date formats or misplaced figures cause processing errors. Enter dates in the required DD/MM/YYYY format and use the correct schedule for each income type.
-
Not Reconciling TDS with Form 26AS
Always cross-check your TDS, TCS and other credits against Form 26AS before filing. If TDS is missing from Form 26AS, you may lose the tax credit and face higher tax liability or delayed refunds. Resolve any mismatch with the deductor before filing.
-
Ignoring AIS and TIS Prefilled Data
Annual Information Statement (AIS) and Taxpayer Information Summary (TIS) feed prefilled values into your ITR. These are pulled from reporting entities like banks and exchanges. Validate the prefilled entries and correct any inaccuracies rather than assuming they are right.
-
Overlooking Multiple Form 16s
If you changed employers during the year, combine incomes from all Form 16s under the salary head. Do not treat each Form 16 in isolation. Aggregation ensures correct tax computation.
-
Missing Out on HRA Claims
If you claim House Rent Allowance exemption, keep rent receipts and landlord PAN handy. If HRA was not processed by payroll, you can still claim it while filing the ITR provided you have proper documentation.
-
Forgetting Available Deductions
Many taxpayers miss out on deductions they are entitled to. Check sections like 80C, 80D and 80TTA carefully. For instance, interest on savings accounts is deductible up to ₹10,000 under Section 80TTA, while FD interest is taxable. Missing deductions means paying unnecessary extra tax.
-
Wrong Treatment of NSC Interest
Interest on National Savings Certificates is taxable but eligible for 80C benefit in most years (except in the final year when tax treatment may differ). Report NSC interest correctly as “income from other sources” so you can claim the appropriate deduction.
-
Failure to E-Verify the Return
If you have tax liability beyond TDS, pay advance tax in the prescribed instalments to avoid interest. Advance tax is usually due on 15 June, 15 September, 15 December and 15 March. Falling short attracts interest under the Income Tax Act.
-
Not E-Verifying the ITR
E-filing is incomplete without e-verification. You must verify your return within 30 days using Aadhaar OTP, netbanking or EVC. If the ITR is not verified, the return is treated as invalid.
-
Ignoring Tax Department Notices
Receiving a notice does not always mean a penalty. Often, it is a clarifying query. However, ignoring notices can escalate issues and attract penalties. Respond promptly and seek professional help if needed.
-
Not Reporting Schedule AL or Schedule FA When Required
If your net income crosses stipulated thresholds, disclosure of assets and liabilities in Schedule AL is mandatory. Similarly, residents must disclose foreign assets and income on Schedule FA, even if they are taxed abroad. Non-disclosure can attract scrutiny and penalties.
Final Thoughts
Small mistakes cost time and money. A careful review of Form 26AS, AIS/TIS, your Form 16(s), and schedules AL/FA will cut most errors. If you have complex income or foreign assets, consult a tax professional. If you want, I can rewrite this into a short checklist for your website, create an FAQ section, or prepare an email template you can send to employees guiding them through common pitfalls.
FAQs
- What should I do if I filed my ITR using the wrong form?
You can file a revised return using the correct ITR form before the revision deadline. Make sure you check your income sources again so the revised return is accurate.
- How do I correct a TDS mismatch in Form 26AS?
Inform your employer or the deductor and ask them to update the TDS return. Once they correct it, the revised amount will reflect in Form 26AS, and you can file safely.
- What happens if I forget to report a small income amount?
Even small or exempt income must be reported to avoid notices. You can file a revised return if you missed reporting it the first time.
